TAKUMI WANTS LOWER PRESCRIPTION DRUG COSTS

Hawai`i residents would pay less for prescription drugs under a bill introduced yesterday by State Rep. Roy Takumi (D, Waipahu-Pearl City). House Bill 47, based on a similar law recently established in Maine, would allow the State to use its bulk purchasing power to negotiate better prices and pass the savings on to residents.

“The pharmaceutical industry is one of the most profitable industries in the world. They sell the very same drugs in Canada and Mexico for 30 to 70 percent less than in the United States because those national governments deal directly with pharmaceutical companies. It makes sense for Hawai`i to seek the same benefits for our citizens,” said Takumi, who also chairs the House Committee on Higher Education.

Takumi said the measure could be of great help to senior citizens, who consume one-third of all prescription drugs sold and often live on fixed incomes. He added that prescription drug prices have increased twice as fast as inflation, leaving uninsured seniors especially vulnerable to escalating health care costs.

While the measure would clearly lower prices for the uninsured, it may also have an effect on the insured, Takumi added. “By reducing the prices of prescription drugs brought into the state, this measure will bring tremendous savings to health insurance companies. The idea is that these savings would then be passed on to consumers through lower premiums. Everybody wins."

Pharmaceutical companies would also stand to benefit from this measure as price cuts would be offset by greater volume of sales. According to a June 1999 Merrill Lynch analysis, almost all of the revenue lost by discounting prices would be recovered in increased volume of sales.

Comparative Prescription Drug Prices Paid by Seniors

Adapted from: Minority Staff Report Committee on Government Reform and Oversight

U.S. House of Representatives, October 24, 1998

*Straub Clinic Pharmacy price list

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